Correlation Between Albemarle Corp and Mercurity Fintech

Can any of the company-specific risk be diversified away by investing in both Albemarle Corp and Mercurity Fintech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Albemarle Corp and Mercurity Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Albemarle Corp and Mercurity Fintech Holding, you can compare the effects of market volatilities on Albemarle Corp and Mercurity Fintech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Albemarle Corp with a short position of Mercurity Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albemarle Corp and Mercurity Fintech.

Diversification Opportunities for Albemarle Corp and Mercurity Fintech

0.08

Correlation Coefficient

Albemarle Corp  Mercurity Fintech

Significant diversification

The 3 months correlation between Albemarle and Mercurity is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Albemarle Corp and Mercurity Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercurity Fintech Holding and Albemarle Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Albemarle Corp are associated (or correlated) with Mercurity Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercurity Fintech Holding has no effect on the direction of Albemarle Corp i.e., Albemarle Corp and Mercurity Fintech go up and down completely randomly.

Pair Corralation between Albemarle Corp and Mercurity Fintech

Considering the 90-day investment horizon Albemarle Corp is expected to generate 2.32 times less return on investment than Mercurity Fintech. But when comparing it to its historical volatility, Albemarle Corp is 2.11 times less risky than Mercurity Fintech. It trades about 0.04 of its potential returns per unit of risk. Mercurity Fintech Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  140.00  in Mercurity Fintech Holding on February 24, 2024 and sell it today you would earn a total of  6.00  from holding Mercurity Fintech Holding or generate 4.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Albemarle Corp  vs.  Mercurity Fintech Holding

Albemarle Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Albemarle Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Albemarle Corp may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Mercurity Fintech Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mercurity Fintech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Albemarle Corp and Mercurity Fintech

The main advantage of trading using opposite Albemarle Corp and Mercurity Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albemarle Corp position performs unexpectedly, Mercurity Fintech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mercurity Fintech will offset losses from the drop in Mercurity Fintech's long position.

The idea behind Albemarle Corp and Mercurity Fintech Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.